This story appears in the May 5, 2014 issue of Forbes
Written by Erin Carlyle
For the average tourist a trip to Hawaii might involve a crowded Honolulu beach, some fruity drinks, perhaps a flower lei. But for those with bigger bank accounts and perhaps the right connections, a completely different Hawaii paradise awaits.
Carved into the lava of the Big Island’s Kona coast, Kukio is Hawaii’s most exclusive neighborhood. The enclave grew out of the adjacent development to the north called Hualalai, when property owners decided they wanted to form an even more restricted community. While Hualalai has a Four Seasons Hotel and welcomes day-trippers, Kukio is open only to homeowners and their guests–you can’t even enter its gates without the express permission of a homeowner. Many of the owners travel from the Bay Area, where a private flying club dubbed the “Kona Shuttle” whisks them to the island and on Thursdays and back again on Sundays.
Billionaire Michael Dell is a major player in both communities: his $64.7 million (assessed value), 18,500-square-foot Raptor Residence (No. 5 on the above aerial shot) is the crown jewel of the Kukio development. Dell’s property comprises three lots and sits atop the broadest stretch of waterfront of all the homes in the community; the home boasts seven bedrooms, seven full baths and five half-baths. Dell is also a part owner in Hualalai, which he acquired via his private investment firm in 2006.
Dell’s next-door neighbor is Paul Hazen (No. 4 on the aerial), chairman of KKR Financial Holding Corporation and the former chairman and CEO of Wells Fargo WFC -0.55%. His $26.7 million (assessed value)10,000-square-foot home has beenfeatured in Architectural Digest. One door further down sits the getaway home of tech investor David L. Anderson, of Palo Alto’s Sutter Hill Ventures. His 7,938-square-foot home (No. 3) boasts five bedrooms, five and a half baths, and direct access to the beach. And next door to Anderson is David Roux (No. 1), cofounder of Silver Lake, the firm that helped Dell take his eponymous company private last year. Roux purchased his home for $20 million in 2007.
Just behind Roux’s home lies the Kona coast getaway of another Silicon Valley capitalist, Bandel Carano of Oak Investment Partners. His 14,680-square-foot home (No. 2) is assessed at $19.7 million and includes seven bedrooms and 11 baths. Carano may not be a household name, but he’s influential: he sits on the board of Kratos, a contractor whose clients include the U.S. government’s national security agencies.
Across the golf course from Roberts and Griffin, it seems that Oaktree Capital Management founder and billionaire Howard Marks has a place. The $23.8 million (2009 purchase price) home (No. 8) is owned by a business that shares the address of Marks’ company. His neighbor not too far down is Bertie Buffett, sister of Warren. Bertie paid just $3.2 million for the lot in 1997, which overlooks the Jack Nicklaus-designed Hualalai Golf Course, and has since built a 6,815-square-foot home (No. 9). Today, it’s assessed at $17.3 million.
Those were the only property FORBES could fit on the above aerial, but there are plenty of other notable owners along this stretch of exclusive Kona coast. Kukio owners include Bob Parsons, formerly of GoDaddy, as well as distressed real estate investor Ellis Short and software investor Doug Mackenzie of Kleiner Perkins Caufield and Byers. Another owner is Paul Stephens, co-founder of $27.7 billion (AUM, Dec. 31, 2013) San Francisco-based asset management group RS Investments. He owns a 9,525-square-foot Kukio home with six bedrooms that is set back from the ocean but still features unobstructed views. The home is assessed at $15.4 million.
Andrew Borrok, a New York real estate investor/attorney/would-be chef, owns an 8,008-square-foot Hualalai home with six bedrooms and seven full and two half baths. But that place is tiny compared to Borrok’s 20,000-square-foot Water Mill, N.Y., estate, currently on the market for $58.5 million. Borrok’s father, Charles, is vice president of real estate giant Cushman & Wakefield.
Chuck Esserman, of consumer-focused private equity group TSG Consumer Partners, bet early on natural and organic food companies, and the decision has evidently served him well. He, too, owns a Hualalai property, a modest, 5,490-square-foot, four-bedroom home he bought for$9 million in 2010. And not too far away is Paul Wick, who has managed a $3.25 billion tech investment fund Columbia Seligman for two decades. Wick bought his Hualalai home, which backs up to Dell’s sprawling residence, for $13.9 million in 2012. Despite having only four bedrooms, the house has four full and three half bathrooms.
Want to purchase your own home in Kukio? There are still lots–and some built homes–available in the second and third phases of Kukio. Fewer properties are actuallyavailable in Hualalai, according to Rob Kildow, head of sales for Hualalai.”I have three homes on the market. They have 20,” Kildow says. ”As far as a vacant lot, it’s very challenging. What we’re seeing now is some people are acquiring some front-row places and tearing them down and building their own version.”
Kildow says he closed a home last week for $17.9 million, and has another closing next week at $12.1 million. ”And none of these homes are on the ocean.”
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